A new US rule aims to block China’s access to AI chips and models by restricting the world

The Biden administration announced a bold and controversial new export control scheme today designed to prevent advanced chips and artificial intelligence are modeled so as not to fall into the hands of adversaries such as China.

The administration’s new “artificial intelligence proliferation rule” divides the world into nations that are allowed relatively unfettered access to America’s most advanced AI silicon and algorithms, and those that will require special licenses to access the technology. The rule, which will be enforced by the Commerce Department’s Bureau of Industry and Security, also seeks to restrict the movement of the most powerful AI models for the first time.

“The US now leads the world in artificial intelligence, both in the development of artificial intelligence and in the design of AI chips, and it is critical that we keep it that way,” US Commerce Secretary Gina Raimondo said previously today’s announcement.

The list of trusted nations is the United Kingdom, Canada, Australia, Japan, France, Germany, Belgium, Denmark, Finland, Ireland, Italy, Netherlands, New Zealand, Norway, Republic of Korea, Spain, Sweden and Taiwan.

Companies in other nations not subject to arms control will be able to obtain up to 1,700 of the latest AI chips without special permission, the rule states. They will be able to apply for a special license to acquire more chips, to build very large data centers using American technology, or to gain access to the most powerful closed model “weights” produced by American firms. Companies will be required to have adequate physical and cyber security in place to obtain a license.

Supply chain activities, including chip design, manufacturing and storage, would be exempt from the rule. Nor will the rule limit Open source AI models like the lama of Meta, says the administration.

Countries with an arms embargo such as China, Iran and North Korea are already barred from receiving advanced chips. The new rule will for the first time limit their access to advanced models.

“The semiconductors that power (AI) and the weight of the model are, as we all know, dual-use technology,” added Raimondo ahead of the announcement. “They are used in many commercial applications, but they can also be used by our adversaries to conduct nuclear simulations, develop biological weapons and advance their armies.”

However, the rule is sure to spark controversy as it could slow international AI sales at a critical time for the industry. This comes just a week before Trump’s inauguration. The ruling sets a 120-day consultation period, meaning the Trump administration will be expected to listen to input, perhaps change the rule and then enforce it.

Nvidiaon a leading global manufacturer of AI chipscalled the rule “unprecedented and wrong” in blog post. “Though cloaked in the guise of an ‘anti-China’ measure, these rules will do nothing to improve US security. Instead of mitigating any threat, Biden’s new rules would only weaken America’s global competitiveness, undermining the innovation that has kept the U.S. moving forward.”

USA now restricts the export of advanced AI chips to Chinaa key geopolitical rival, but companies there have been able to build cutting algorithms using computer clusters located in other nations. Under the new rule, China will not be able to build so-called frontier AI models in other nations affected by the rule.